Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The time bomb in the tax code that's fueling mass tech layoffs

qz.com

Post reply on HN
Print view View original

941–950 of 991 posts

Re: The time bomb in the tax code that's fueling mass tech layoffs

#941

Post by mixmastamyk »

g42gregory wrote: post #841

Big Tech companies have a direct line to the US Governments. Whether it’s former Twitter and Biden or Palantir and Trump, they can pick up the phone and change this. Are you telling me that this law affects these tech companies so much and they just let it stand? I find this improbable.

It primarily destroys new startups and hurts small business, which do not have the clout you suggest. BigTech can barely hear the bump in the road while sitting on billions of cash reserves. Still, they had layoffs for this and other reasons.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#942

Post by AnthonyMouse »

Retric wrote: post #781
demosthanos wrote: post #770

Earlier quoted context omitted.

Eventually, as long as you survive that long. As has been said repeatedly in this thread, this change is purely a boon for existing big tech companies that now have even less to worry about from startups. It takes a startup 5 years before they'll be playing on an even field with big tech. > if you’re operating a profitable company You keep saying this across this thread, and keep ignoring that Section 174 has now red…

> You keep saying this across this thread, and keep ignoring that Section 174 has now redefined "profitable" for tax purposes to include companies who: Because generating an asset IE software isn’t a pure loss that’s why you’re doing it in the first place. Companies with a cash flow problem are different than companies which an actual loss. > i.e., a startup that earns $1mil and spent $8mil in software dev expenses i…

> That assumes 100% of expenses are software development related. But the numbers are imaginary so using your example taxes are 21% of 200k, so 7 million in losses = 7.042 million in losses. A 1/2 of 1% increase, the sky is fucking falling.

The problem here is that the losses are often in time or future liabilities but the government expects to be paid in cash. Your developers were mostly working for stock options or some other deferred compensation, which may cost you tomorrow but tomorrow you'll have more revenue. Where are you getting the cash to pay the government right now?

Re: The time bomb in the tax code that's fueling mass tech layoffs

#943

Post by mixmastamyk »

GuinansEyebrows wrote: post #278

so will this incentivize a return to revenue/profit-driven business models? will we start to see a reduction in venture capital burning money on revenue-negative startups?

Higher interest rates were enough to help in that regard.

As it stands, this is an end to innovative startups in the US. Unless bankrolled by very deep pockets. The type of pockets who typically prefer the status quo and are not particularly interested in cost-efficient innovation.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#944

Post by compfingers »

thegrimmest wrote: post #794
iancmceachern wrote: post #783

Earlier quoted context omitted.

These are most certainly left up to the individual. None of these things were part of my, and most folks' public education.

I would disagree. Many ideological worldviews are taught in the curriculums of the public education system. For instance, the idea that homosexuality is wrong (not a view I personally hold) is not tolerated. Students are taught that homosexuality is a valid, normal, way to live (and I happen to agree). However, whether it is right or wrong, valid or invalid, is an ideological argument. Schools should simply teach tha…

School's do not teach ideologies because Ideologies are a set of beliefs resistant to contrary fact.

Homosexuality being normal and valid is not an ideology, it's accepted scientific truth. Being against it is an ideology.

You are saying "countless ideological worldviews" are being taught, but I'm struggling to come up with even one, and my wife is a teacher

So, what is a view you personally do hold, to defend your viewpoint so firmly?

Re: The time bomb in the tax code that's fueling mass tech layoffs

#945

Post by AnthonyMouse »

Retric wrote: post #826
demosthanos wrote: post #825

Earlier quoted context omitted.

> Because generating an asset IE software isn’t a pure loss that’s why you’re doing it in the first place. Tell me you're not an experienced software engineer without telling me you're not an experienced software engineer. Code is a liability, not an asset.

> Code is a liability, not an asset. So you have no idea what that phrase means. If you don’t think code is an asset don’t write it. O wait obviously that’s not what code is a liability means. Code is a liability in the same way roads or buildings are a liability, they incur an ongoing cost, but removing the US highway system would be just as idiotic as a startup deleting their source repository from a misunderstood…

> More importantly valueless code stops being a liability because you can abandon it. Calling it a liability implies it has value.

This is kind of missing the issue though.

Suppose you pay a million dollars this year to develop something that will also cost a million dollars a year to maintain, but is worth over a million dollars a year, so you do it anyway.

So this year you spend a million dollars, make $1.1M, have a profit of $100k. Next year you'll spend a million dollars, make $1.1M, have a profit of $100k. But if you don't do the maintenance, it ceases to comply with changing regulatory requirements and not only has to be shut down but causes you to incur criminal penalties, or develops public security vulnerabilities and then criminals break in and destroy your business and cause you to be sued into bankruptcy by your customers.

In other words, the code creates an obligation that offsets the value of the asset. These two things can easily cancel out so that the total value is ~0 -- or even negative in ways that don't allow you to walk away, e.g. because you entered into a contract to supply this thing for a defined price but underestimated the maintenance cost.

But now the government is telling you that you have something worth most of a million dollars even though it's not worth a dime without putting another million dollars into it -- and even then it still wouldn't be worth two million dollars.

The reason you continue to do it is that the continued development made you $100k this year, not because what you had left at the end of the year that would be worth something without further investment.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#946

Post by _heimdall »

motorest wrote: post #920
_heimdall wrote: post #917

Earlier quoted context omitted.

My claim wasn't whether trump is responsible, of course his tariffs are having a very real impact. My point was that one should never expect a politician to admit that, at best they dodge claiming responsibility but more often than not they point at someone else, often the last person in office. If you'd like to say my claim is uninformed that's fine, but I ask again for examples when a politician directly owned thei…

> My point was that one should never expect a politician to admit that, (...) That's the problem with your false dichotomy: Trump already admitted tarrifs create economic problems. https://fortune.com/2025/02/02/trump-tariffs-americans-some-... Trump blaming predecessors for the problems created by his tarrifs policy goes way beyond your run-of-the-mill predecessor blaming. Trump is simultaneously warning his tarrifs…

To be clear, this is the quote that article references.

> “WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!),” Trump said in a social media post. “BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.”

That doesn't read to me as Trump claiming responsibility for any pain that we might see, and it isn't an apology. Even better, he ultimately doubles down on the tariffs and claims the end result will be worth any of the pain that he doesn't directly acknowledge he will have caused.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#947

Post by ciberado »

systemf_omega wrote: post #609
warkdarrior wrote: post #97

Earlier quoted context omitted.

Software developers are already too expensive in US, so this applies some downward pressure on those salaries. Frankly the economy will be much better off when tech salaries equalize across geos, thus avoiding the deep whole US manufacturing is in (for example, manufacturing wages in Vietname are one tenth of US manufacturing wages, and thus it is better to open new plants there).

If you want equalized poverty, feel free to move to the EU. Say goodbye to owning a nice house, or building any kind of wealth - that's reserved for the old money class. In the US, software is one of the few remaining ways to achieve the American dream. I came to this country to work hard and earn money.

I don't think we share the same definition of poverty.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#948

Post by const_cast »

rayiner wrote: post #404
rezonant wrote: post #375

Earlier quoted context omitted.

No, this is a misunderstanding of the kind of taxation policy progressives tend to favor. Taxation on profit for businesses should be high, and taxation on upper tiers of individual income should be high, but taxation on funds businesses use to reinvest should be exempted or deductable. Basically the taxation we had in place after WW2 and on, with a steep corporate tax rate and more or less a maximum income for indiv…

I don’t think most progressives think about it in that detail. Raise taxes on the rich tech companies that are gentrifying san francisco.

But this doesn't raise taxes on rich tech companies, it effectively does the opposite - the tax burden is proportionally lower the larger/more successful the tech company is.

Therefore, even by your own admission, this isn't progressive policy.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#949

Post by const_cast »

rayiner wrote: post #653
glompers wrote: post #429

Earlier quoted context omitted.

This civic control correlation can simply have more to do with the most-white-supremacist Democrats switching to the GOP en masse and also simultaneously leaving multiethnic cities and school districts en masse after the 1960s. That self-selection left Republicans not a competitive amount of credibility or voter pool behind to work with. Your implication that policy dysfunction has ensued on that account rather than…

> That self-selection left Republicans not a competitive amount of credibility or voter pool behind to work with. So by your logic New York is a better governed state than Florida? Net internal migration would seem to disagree.

> So by your logic New York is a better governed state than Florida? Net internal migration would seem to disagree.

Yes, and it's not even close. Choose just about any metric and NY is running laps around Florida.

And, not just Florida, but red states in general. If you look at the metrics, they typically are some of the poorest states with the worst outcomes. Bad infrastructure, bad education, not a lot of job opportunities, horribly impoverished, under-developed.

It's just that nobody cares. Nobody expects Louisiana or Florida to be decent places to live. But since California is the economic powerhouse of the US, people do expect it to be decent. That's the issue, the blue states are essentially carrying the economy of everything else on their back, so they now get a new, unfair set of standards.

There's some exceptions here, mainly Texas.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#950

Post by vlovich123 »

bluGill wrote: post #849
vlovich123 wrote: post #685

Earlier quoted context omitted.

I can’t tell if they’re trying to refute the point (ie the list being long means that it’s definitionally not being hid) or support (ie the list I made is finite and therefore the corruption is hid). But I think of it like trying to estimate the size of an iceberg by observing the tip. Just because you know a little bit doesn’t mean you actually know about the scale. And there’s every reason to believe it’s quite ext…

There is corruption everywhere. If there is a short list that means that the truth is being hid, or your have way too much police (often both). As you state, the size of the iceberg cannot be understood by what we can easially observe. While there is corruption in the US, it isn't really much worse than other places that are not known for corruption - though understand that the US has a lot higher population and so i…

The US also sees a huge amount of wealth directly or indirectly flowing through it. I would say that’s the attraction for illegal activities, less the amount of people.

And I don’t know how small you think the list is, but I suspect it’s quite small because whether you get prosecuted from some corrupt act is pretty random since someone has to notice the corruption and try to investigate. Additionally the recent moves by SCOTUS is to significantly raise the bar for prosecuting corruption. So however you think America is fairing compared to other countries, I’d say America today is allowing once more, more institutionalized corruption than it had in the second half of the 20th century (and America’s history is filled with top-to-bottom corruption).

Post reply on HN